Deprivation of assets possible care home fees

This is the situation OH elderly great aunt wants to come and live here on the Island - would be wicked if she did .

She has a house on the mainland worth in todays market 400k (no mortgage) she has been looking at properties near us for 150K so could afford to pay cash and have a lump sum (lucky lady)

However she also wants to help out her grandson, GS has 2 DCs but does not earn enough to get a very large mortgage, the most he could get is £250k.

What GA wants to do is to sell him HER house for £250k (3 bed with garden nice area) which would still give her enough for a nice Island property.

Now thats looks to be a win win situation for all concerned. HOWEVER although she is hale and hearty I am worried that if she sells her house for less than the market value and she needs to go into a care home in the future - she might be accused of Deprivation of assets by the council if assessed for help with any care home fees.

Looking at sites like age UK that could well be the case, If she did go down that route would her GS be asked to sell his home to meet any additional care home fees she incurs, is there any other way she could give GS the help he needs without putting herself in what could well be a difficult situation.

She is BTW 84 full of health and very active she may not even NEED to go into a home, but I think we need to look at this situation now before her house is sold.

BTW GS is very grateful and has already said he does NOT intent to take advantage of his 'good luck' by selling it for market value in a few years, its a family home and he wants him and his family to live there.

It's certainly true that if assets are 'deliberately disposed of' in any way then any local authority could make a bid to recoup them if care fees come due within a seven year period.

However in my experience each case would be looked at on an individual basis and if intentions were genuine at the point of 'gifting' or whatever then I think it is very. Likely legal action would be taken.

On the other hand if you wanted to be really sure then it's probably possible to do something with the property which will make it available for G'S to live in 'forever' by placing it int a family trust, this would require specialist legal advice though to make sure it was watertight and to sort out ow the equity could be released to enable GA to purchase her new home.

my understanding is that the 7 year rule doesn't actually exist regarding deprivation of assets and any evidence of getting rid of money/property to avoid future care home fees is investigated regardless of how long it was since it happened. e.g. a person diagnosed with MS giving away money even though they may live another 20 years.

Many people confuse deprivation of assets with inheritance tax rules.

If at this moment in time there is no suggestion that your relative is going to need care any time soon then inheritance tax rules probably apply first in other scenarios.

In the situation you talk about she is selling her house.... its up to her who she sells it to and how much for but there are also pitfalls involved around Inheritance Tax etc. I'm sure someone with better knowledge than me will come along eventually but I think deprivation of assets is the least of your worries considering she is fit and healthy currently - its a complete myth that all older people will eventually have to pay for care home fees, many don't ever need that type of care. If she has got to 84 and is still doing great its pretty unlikely she is going to need long term residential care.